Along those lines, I need to mention this one rule:
Always know the statute of limitations on debt collection for your state, and always know whether or not it has expired for the debt in question. THIS INFORMATION SHOULD AND WILL AFFECT YOUR TACTICS.
Don’t think being past the SOL will prevent a lawsuit by itself, though. If the amount is large enough, a collector may still sue and hope for a default judgment (i.e. you didn’t show up to defend yourself) or otherwise hope that you aren’t aware of the SOL being expired.
So to the question at hand:
How can you remove a collection account from your credit report?
There are five basic strategies upon which most other tactics are built. There are more details on these than I can’t possibly cover in a single article, but I’m going to give you an overview here that should be enough to get your feet wet. The five basic strategies are:
This means you make an offer to settle the debt with the collector in exchange for removing the collection from your credit report. Settlement could include "payment in full". Settlement usually means offering a lower amount than what they are asking and/or asking for some other concession, such as the removal of the item from your credit report.
2. Back to the creditor.
This means it’s going to end in settlement, but the settlement will be with the creditor rather than the collector. This can’t be done if the debt has been bought and sold 5 times. It only applies when a collector has contracted to collect for a creditor. On a larger debt that is contracted out, sometimes it is much better to try and get it back to the creditor because they may be more likely to work with you if you’re polite, and they will have more negotiating room than what they would typically allow the contracted collector.
3. Challenging the right to collect.
Note that this includes the "validation" process. If the debt is not valid, the validation process itself may be enough to get rid of it, or at least give you the legal leverage you need to do so because the debt collector doesn’t have the right to collect on a debt that they cannot validate under the FDCPA. Other methods suggest simply asking what law gives the collector the right to force you to do business with them. Be careful with this second approach. With a large enough debt, it could result in a lawsuit (while it’s unlikely that the collector will sue you after a single request like this, it could happen.)
4. Pay and prey.
Note that I didn’t say "pray" here but "prey". And "prey" means that you go after the collector AFTER you have paid the debt in full. This can work for small debts where the collector refused to settle in exchange for removal… or even paid collections or large debts that you can wipe out with a friendly loan or payment from another line of credit.
One way of doing this is to send a letter to the collector with a basic complaint based on another dispute tactic (such as validation or challenging their authority to collect), but stating that they failed to notify you of your rights under the law and committed fraud by omission. Then offer the removal of the account from your credit as a means to consider the matter closed.
This can also be useful if you pay a collection account out of fear and then later realize that it wasn’t a valid account, you had already paid the creditor, or something similar. (In cases where it had already been paid you would of course want to attempt to recover your lost funds.)
5. Violation Bingo.
What I call violation bingo is simply making standard requests that you are allowed by law to make and watching the collector fail. Record phone calls, analyze correspondence in detail, and for every violation, note the rising total as compared to the amount of the debt. On smaller debts, if there are substantial violations, sometimes simply putting the collector on notice is enough to get the account to go away permanently.
With these five methods you can probably make a lot of progress at removing collection accounts from your credit report.
Please remember that none of this is legal advice and when things get sticky or you have questions about the law, you should always consult with an attorney. Also remember that debt collectors CAN sue you and are more likely to do so when the SOL hasn’t expired and the amount owed is large. So be careful, and make sure you know what you’re getting yourself into with each collection account that you tackle.